Newmont (NEM) to Report Q4 Earnings: What's in the Cards?

22 Feb 2024

Yahoo Finance

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Newmont NEM to Report Q4 Earnings Whats in the Cards

Newmont's (NEM) fourth-quarter performance is likely to have been aided by improved production, higher prices and lower costs.

Newmont Corporation NEM is scheduled to report fourth-quarter 2023 results before the opening bell on Feb 22.

The gold miner missed the Zacks Consensus Estimate in three of the trailing four quarters while beating it once. For this timeframe, the company delivered a negative earnings surprise of roughly 3.7%, on average. Newmont posted a negative earnings surprise of 14.3% in the last reported quarter. NEM’s fourth-quarter performance is likely to have been aided by improved production and lower costs. Moreover, higher gold prices are expected to have supported its results. The stock has lost 26% in the past year compared with the industry’s 3.2% decline.

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Let’s see how things are shaping up for this announcement.

What Do the Estimates Say?

The Zacks Consensus Estimate for fourth-quarter consolidated revenues for Newmont is currently pegged at $3,171.4 million, which calls for a decline of around 0.9% year over year.

Some Factors to Watch For

The company’s fourth-quarter results are likely to have been supported by higher production. The ramp-up of operations at Penasquito following the resolution to the union labor strike, improved production performance from Nevada Gold Mines and Pueblo Viejo and strong results from the remainder of the portfolio are expected to have aided its production.

Our estimate for attributable gold production is pegged at 1.62 million ounces for the quarter to be reported, which suggests a 25.7% sequential increase.

Newmont faced headwinds from higher costs in the third quarter. The company saw higher unit costs in the third quarter partly due to lower gold sales volumes. However, it is expected to have benefited from lower unit costs from higher production volumes in the fourth quarter. Our estimate for all-in-sustaining costs stands at $1,326 per ounce, which indicates a sequential decline of 7%.

Meanwhile, gold had a solid fourth quarter on the back of strong safe-haven buying due to geopolitical tensions in Israel. Gold prices hit an all-time high in early December, surpassing $2,100 per ounce for the first time on expectations of U.S. monetary policy easing and a weak U.S. dollar. Prices were also supported by the Israel-Hamas conflict, which boosted the demand for safe-haven assets. Prices of the yellow metal eventually racked up a solid gain of roughly 11% for the December quarter.

The impacts of higher gold prices are expected to reflect on Newmont’s results in the fourth quarter. Our estimate for fourth-quarter average realized prices of gold stands at $1,991, which suggests a 13.3% year-over-year increase and a 3.7% rise on a sequential basis.

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Newmont Corporation Price and EPS Surprise

Newmont Corporation price-eps-surprise | Newmont Corporation Quote

Zacks Model

Our proven model does not conclusively predict an earnings beat for Newmont this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Newmont is -10.64%. The Zacks Consensus Estimate for fourth-quarter earnings is currently pegged at 50 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Newmont currently carries a Zacks Rank #5 (Strong Sell).

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Ero Copper Corp. ERO, scheduled to release earnings on Mar 7, has an Earnings ESP of +10.68% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for ERO’s earnings for the fourth quarter is currently pegged at 26 cents.

Eldorado Gold Corporation EGO, slated to release earnings on Feb 22, has an Earnings ESP of +5.88% and carries a Zacks Rank #2 at present.

The consensus mark for EGO’s fourth-quarter earnings is currently pegged at 21 cents.

Franco-Nevada Corporation FNV, scheduled to release fourth-quarter earnings on Mar 5, has an Earnings ESP of +0.63%.

The Zacks Consensus Estimate for FNV's earnings for the fourth quarter is currently pegged at 80 cents. FNV currently carries a Zacks Rank #3.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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